The transaction is subject to the usual conditions, including the receipt of regulatory approvals as well as EPD’s completion of a labour agreement with the United Steelworkers union.
As part of the transaction, Goodyear has agreed to a trademark licensing agreement with EPD to use the Goodyear brand and other trademarks in connection with the engineered products business.
Goodyear expects to record a gain on the sale, the amount of which has not yet been finalised.
“This transaction reinforces our focus on our core consumer and commercial tyre businesses and on improving our balance sheet,” said Goodyear chairman and chief executive officer Robert Keegan. “We anticipate using the proceeds for purposes including reducing debt, addressing legacy obligations and supporting growth in our tyre businesses.”
Specific plans regarding debt reduction and investments will be announced later.
Goodyear Engineered Products operates 32 facilities in 12 countries and has approximately 6,500 workers. It manufactures and markets engineered rubber products for industrial, military, consumer and transportation original equipment end-users. The product portfolio of the business includes hose, conveyor belts, power transmission products, rubber track, moulded products and air springs.
In 2006, Engineered Products had sales of approximately $1.5bn.
The Carlyle Group is one of the world’s largest private equity firms.